Challenge to Spanish takeover of Abbey National

23rd August 2004, Comments 0 comments

23 August 2004, LONDON - British bank HBOS said Monday it would file a complaint to the European Commission regarding Santander Central Hispano's (SCH) multi-billion-pound bid for Abbey National due to competition issues. HBOS, which was considering launching a counter-bid for British mortgage lender Abbey, is to launch a complaint about SCH's current ties with Royal Bank of Scotland (RBoS).

23 August 2004

LONDON - British bank HBOS said Monday it would file a complaint to the European Commission regarding Santander Central Hispano's (SCH) multi-billion-pound bid for Abbey National due to competition issues.
 
HBOS, which was considering launching a counter-bid for British mortgage lender Abbey, is to launch a complaint about SCH's current ties with Royal Bank of Scotland (RBoS).

"It can't be acceptable that one of the largest of the big four banks in the UK could sit on the board of a company that owned one of the major challengers to the large (British) banks," an HBOS spokesman said.

SCH has had a bid worth EUR 13.5 billion (GBP 8.9 billion or USD 16.4 billion ) for Abbey accepted by the British bank's board, while the European Commission was expected to conclude its preliminary investigation into the proposal by 17 September.

A deal between Abbey and SCH would create the fourth-biggest bank in Europe by market capitalisation - behind HSBC, the Royal Bank of Scotland and UBS -and the eighth-biggest worldwide.

HBOS said it was calling for SCH and RBoS to dissolve their cross-shareholdings set up in 1988, and at the very least wanted to ensure their directors were no longer allowed to sit on each other's boards.

SCH owns about 5.0 percent of RBoS' stock and the Scottish bank has a 2.8 percent stake in SCH.

SCH has two executives on the Scottish bank's board while RBoS chairman George Matthewson sits on the Spanish bank's top table.

HBOS said also that it wanted to ensure there had been no secret agreement struck between SCH and RBoS, whereby the Spanish bank would outsource various Abbey National back office functions to RBoS on favourable terms.

"There can be no room for cosy gentlemen's clubs in UK banking," the HBOS
spokesman said.

"It's very important for the sake of all British stakeholders we have a level playing field."

[Copyright EFE with Expatica]

Subject: Spanish news

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